Virgin Atlantic shareholders vote Tuesday on a $1.6 billion stimulus proposition and will determine how the carrier can continue doing business in the pandemic-ravaged industry. The company's shareholders and creditors finalized a deal last month to proceed with operations no matter the outcome of the crisis.
Three creditors have already promised to support the Richard Branson-led British airline and are currently awaiting the nod from a fourth that will decide the fate of the carrier.
Should creditors not approve the stimulus proposal Virgin Atlantic's next move will be to win the government's vote - which under a new British policy can decide on a refinancing alternative to avert insolvency even if other investors vote against the measure.
Virgin Atlantic said it remained optimistic the restructuring would be approved and was on course to complete recapitalization requirements by the first week of September. A procedural hearing is set for Sept. 3 in the U.S. The Virgin Group Ltd. - controlled by Branson - owns more than half of Virgin Atlantic while Delta Airlines has almost 50 percent.
The carrier must get the support of 75 percent of creditors by value with the votes measured in favor of parties to whom the company owes the most, a representative for Virgin Atlantic said.
Virgin Atlantic was forced to end operations at London's Gatwick Airport and lay off more than 3,500 workers as a result of the coronavirus crisis which has grounded many of the company's planes and battered travel demand. Based on projections by the International Air Transport Association the worldwide airline market won't return to normal until at least 2024.
Without the stimulus the company has until next month only to stay in business, Virgin Atlantic's chief executive officer Shai Weiss said. The rescue funding includes new rounds of a cash infusion from Branson and American hedge fund Davidson Kempner Capital Management LP.
